The shift reflects a broader rethinking of what a brokerage is actually worth to an agent in a market where leads, tools, and training are increasingly available outside any single firm.
For agents willing to run the numbers, the case for staying with a legacy brand is becoming harder to make.
Splits Don’t Add Up
Tara Smith, Owner and Team Leader at Tara Smith Team with LPT Realty in Butler, Pennsylvania, spent time at both Berkshire Hathaway and eXp Realty before joining LPT Realty. The decision to leave traditional splits behind was not philosophical – it was arithmetic.
Under her current structure, Smith pays $595 per transaction. After 10 transactions, the only remaining cost is a $195 per-deal fee for the rest of the year. Compare that to a traditional 70/30 or 80/20 split that runs year-round, plus office fees and additional charges. “You’re paying $200 compared to sitting at Berkshire going through a 70/30 or an 80/20 split for the whole year, plus paying office fees and all these crazy fees,” Smith says.
For agents producing at even moderate volume, the difference in annual take-home pay is substantial. Under a traditional split, every additional transaction sends a portion of earnings back to the brokerage. Under a capped structure, volume works entirely in the agent’s favor past a certain threshold – a shift in incentive design that attracts agents who are actively building teams rather than simply maintaining a book of business.
Legacy Brands Faltering
Recent acquisition activity among established brokerages suggests the traditional model is under financial pressure. Smith points to the acquisitions of RE/MAX and NextHome as evidence that legacy brands are being absorbed rather than growing organically.
Many traditional brokerages carry the overhead of physical offices, regional management layers, and legacy technology systems built before mobile-first tools became standard. As agent count grows, those fixed costs become harder to distribute – especially when competing brokerages are operating with near-zero physical footprint. The consolidation trend may be less about strategic expansion and more about survival economics.
She argues that brand recognition, once the primary value a brokerage offered its agents, no longer carries the weight it once did. Buyers and sellers are choosing agents, not logos. “They’re using the agent to sell the house, not the actual brokerage,” Smith says. Whether her prediction that brick-and-mortar brokerages will largely disappear within five to ten years proves accurate, the questions it raises about the long-term sustainability of their agent value proposition are legitimate.
Veterans Resist Change
One of the most consistent patterns Smith observes is that veteran agents – those who have been in the industry for years or decades – are the least likely to switch to cloud-based models, even when the economics favor doing so. She attributes this to comfort and habit. “A lot of these older agents that have been Realtors for a long time – they’re stuck in their little niche,” Smith says. “They don’t want to go out of their comfort zone and try something new.”
The reluctance reflects genuine switching costs – relearning systems, rebuilding referral networks, adjusting client communications. But those costs are temporary, while the financial and equity benefits of the new model compound over time.
Smith credits her own willingness to move to timing and mentorship. Having entered real estate during the pandemic, she was not yet entrenched in a particular brokerage culture, and her leaders introduced her to the cloud-based model early. What her experience also reveals is a generational divide forming within the industry. Newer agents are digital natives who default to virtual tools and platform-based workflows, and as this cohort grows in market share, the cultural pressure on traditional brokerages will intensify – not just from economics, but from shifting expectations about how work gets done.
The Cloud Alternative
The cloud-based brokerage model is no longer an experiment – it is a maturing segment of the industry with multiple competitors, established infrastructure, and a growing agent base. eXp Realty pioneered much of the structure now being replicated: flat transaction fees, equity incentives, revenue sharing, and virtual-first operations that eliminate the overhead of physical offices.
What makes the model compelling is not any single brokerage but the underlying design. Agents earn stock through production and recruiting rather than purchasing it on the open market, and revenue sharing creates income streams that extend beyond closed transactions. Technology platforms – increasingly built around AI-assisted CRM tools, automated transaction management, and agent-facing analytics – are closing the capability gap that once gave traditional brokerages a clear advantage.
For agents evaluating their options, the decision is less about which cloud-based brokerage to choose and more about whether the model itself aligns with how they want to build their business. Those who evaluate brokerages primarily on split percentages – rather than on equity participation, revenue sharing, and technology – may be optimizing for the wrong variable. If consolidation among legacy brands continues and cloud-based models keep gaining ground, that calculation will become harder to ignore. The question is whether experienced agents will follow before the gap in long-term earnings becomes too wide to close.
About the Article: Tara Smith is the Owner and Team Leader of the Tara Smith Team at LPT Realty, covering Butler, Pennsylvania and surrounding areas. She has previous experience at Berkshire Hathaway and eXp Realty prior to joining LPT Realty.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
